Texas Parks and Wildlife CommissionAd Hoc Infrastructure Committee

Jan. 26, 2011

BE IT REMEMBERED, that heretofore on the 26th day of January 2011, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the Commission Hearing Room of the Texas Parks and Wildlife Department Headquarters Complex, to wit:

APPEARANCES:

THE TEXAS PARKS AND WILDLIFE COMMISSION:

Ralph H. Duggins, Fort Worth, Texas, Committee Chairman

Peter M. Holt, San Antonio, Texas, Chairman

Mark E. Bivins, Amarillo, Texas

Antonio Falcon, MD, Rio Grande City, Texas

T. Dan Friedkin, Houston, Texas (absent)

Karen J. Hixon, San Antonio, Texas

Dan Allen Hughes, Jr., Beeville, Texas

Margaret Martin, Boerne, Texas

S. Reed Morian, Houston, Texas

THE TEXAS PARKS AND WILDLIFE DEPARTMENT:

Carter P. Smith, Executive Director, and other personnel of the Texas Parks and Wildlife Department

P R O C E E D I N G S

COMMISSIONER HOLT: Happy New Year. The first meeting of 2011. Probably won’t be the last. With our friendly legislature down the road or up the road or whatever you want to call it, I assume we are going to be spending a lot of time in Austin over the next few months. But I am glad to be here. I am glad everybody else is here.

The meeting is called to order, January 26, 2011, at 9:10 a.m. Before proceeding with any business, I believe Mr. Smith has a statement to make.

MR. SMITH: I do, Mr. Chairman. Thank you. A public notice of this meeting containing all items on the proposed agenda has been filed in the office of the Secretary of State as required by Chapter 551 of the Government Code, referred to as the Open Meetings Act. I would like for this fact to be noted in the official record of the meeting. Thank you, Mr. Chairman.

COMMISSIONER HOLT: Right. We will begin with the Ad Hoc Infrastructure Committee this morning.

Chairman Duggins, please call your meeting to order. Did you know you were going to get to be first?

COMMISSIONER DUGGINS: I do now. Okay. First item of business is to approve the minutes from the March 31, 2010, meeting. Is there a motion for approval?

COMMISSIONER HIXON: So moved.

COMMISSIONER FALCON: Second.

COMMISSIONER HOLT: Okay. A motion by Hixon, a second by Commissioner Falcon. Any objection to the minutes?

(No response.)

COMMISSIONER DUGGINS: All right. Deemed approved.

Carter, would you please update us on the progress of the Land and Water Conservation Plan issue?

MR. SMITH: I will. Thank you, Mr. Chairman. First things, first. I am going to pass out, basically a score card to all of you, on how we are doing with respect to meeting kind of the key metrics in the Land and Water Plan.

As all of you will recall, we were tasked with kind of 25 measurable items that were quantifiable and that we would seek to accomplish over the course of the plan’s duration. We set target dates for their completion. I am not going to go through this document. I will let you all take that with you, and read through it.

But you know, basically again, 25 specific metrics, 16 of which were slated to be completed in fiscal year 2010. The remaining nine in 2011. You will see on this document. I will call your attention just very quickly to pages 2 and 3, which gives you a tabular format of the specific goal of who is responsible, when it is going to be done, and what its status is.

And so you can see. For instance, all of the items that are colored in green are ones that we have completed. Ones that are in orange are ones that either we didn’t meet our target, or we are still working on them. And we have brief explanations in those tables for them, and also more detailed explanations for you in the back.

All in all, I think we are making good progress here, as we sort through this plan and get a better handle on the metrics associated with these goals. I think we will be able to let you know just how realistic some of our targets were. But if you see anything after you have had a chance to peruse them that gives you any pause about things that we have either met or not met, please let us know.

I also want to let you know, that thanks to the work of Maria Araujo, we have a Spanish language version of the Land and Water Plan. And so we are very excited about that development. Maria did an extraordinary job on the translation, had help from others inside of the agency. But that was an important element of this as well. So I wanted to share that with you.

Any questions on that, Mr. Chairman?

COMMISSIONER DUGGINS: Yes. On page 3, where are a little bit short on hosting families in the Outdoor Families program. Of which I think everybody here is so excited about that program. Is that a funding issue? I mean, I know the demand has just been overwhelming the staff.

MR. SMITH: You are absolutely right. And in fact, you know, our program team is working on that. We felt like that goal was ambitious to start off with. Then we had a couple of other issues. We had some weather-related events that caused us to have to cancel some things. And then we had one big group I think, that cancelled.

That is a program where we could certainly benefit from additional funding in order to meet the demand. We just continue to see that explode throughout the state. And we really do have limited capacity to meet that.

And so I think the issue is going to be, what can we reasonably do with the team that we have now on board. And then also, how can we export that program to other partners that can implement it, and still get the same thing accomplished, but kind of utilize the key standards that we set up for it.

COMMISSIONER DUGGINS: On Item 20, the item about the identifying 40 undocumented springs. What do we mean by characterize?

MR. SMITH: So in that regard, most Texas springs are located on private lands. And historically, we really haven’t focused, or in some cases, had access to go in and do physical and chemical and biological characterizations of those springs. What kind of organisms are living in those springs. What is the quantity of flow, seasonally.

What kind of fluctuations. What is the water chemistry? What is the condition of the riparian areas around those springs? Through the work of Chad Norris and others, we have really pushed on this, and made it a priority to get out there and better understand the springs that are so critical in terms of feeding our rivers and creeks. And so that is what we mean by characterization.

COMMISSIONER DUGGINS: Is there any size limitation?

MR. SMITH: No. We are interested in all springs, big and small. You may recall that there is kind of a seminal work on springs in Texas that was done by a gentleman named Gunnar Brune with the Water Development Board. And he put together a book called The Springs of Texas, in which he documented a number. A great book.

But really, there has been little focused effort to go back and look at those springs and see, are they still flowing. And if so, what is their quality and quantity. And so that has been a priority for us and others on that front.

COMMISSIONER DUGGINS: Anybody else have anything?

COMMISSIONER BIVINS: Back up on the family, I mean, is the 650 an annual goal?

MR. SMITH: It is. It is an annual goal.

COMMISSIONER BIVINS: I mean, do we need to revise it? Or are we going to ‑‑

COMMISSIONER HOLT: Keep looking at it, depending on the budget funding coming out of this legislature.

COMMISSIONER BIVINS: Okay.

MR. SMITH: Yes. I think that is right. Let’s see how we do next fiscal year. And then, I think we ought to keep our goal as is. Let’s see how we perform in 2011. If we think it is wildly unrealistic with existing capacity, we will come back and report that to you, and see if you are comfortable with a changed goal.

COMMISSIONER BIVINS: And then on number 5, the prescribed fires. Who established that acreage figures?

MR. SMITH: Those acreage figures were really established largely by our Wildlife Division team, and our State Parks team, both of which do the vast lion’s share of prescribed fire around the state. And so, those metrics you know, reflected what we felt like we could do reasonably on our state Wildlife Management Areas and state parks.

And then also, the work of our Wildlife Division to get those landowner fire co-ops established in all of our ecoregions. As you know, we always have such a narrow window to get prescribed fires done. And so, that constrains us. And you know, on a day when it is good to be burning, we want to be doing that everywhere, and we can’t.

And so we fell short in that regard again, largely to weather-related issues. I suspect there will be some years where we will vastly exceed our goals and there are going to be others in which we don’t make it.

COMMISSIONER BIVINS: We are burning quite a bit in the Panhandle right now.

MR. SMITH: Yes. Good. A lot of burn bans around still that, you know, are causing landowners a lot of consternation, who want to burn.

COMMISSIONER DUGGINS: Actually, that was the question I had. Are we constrained by county burn bans?

MR. SMITH: Well, the way that the state law reads, as I understand it, is that you have to have a certified burn manager in order to be able to get a waiver from a county judge to be able to burn at which time there is a prescribed burn ban. And so we have got to work closely with the county and the Commissioners Court to see if we can get exempted to do it safely and responsibly when there is a ban.

COMMISSIONER HOLT: A lot of people aren’t certified ‑‑

MR. SMITH: Yes, they are. But really, the state certification was designed really for private landowners and non-governmental employees. So there is a little issue there. I don’t know if Ann or Clayton wants to elaborate on that. I see everybody looking around behind them for somebody who knows what they are talking about. So ‑‑

COMMISSIONER HOLT: Even on a burn ban, as a private landowner, if you are certified, you can burn. You have got to go get the okay from the county judge. But you can burn.

COMMISSIONER BIVINS: But could a state or, say on a Wildlife Management Area, if we wanted to do a burn, could we hire a private, like the Panhandle Burn Association. Can we hire a private entity to come in and do it?

MR. SMITH: That is certainly an option. You know, on both the Wildlife Division and the State Parks Division, we are using a standard that is set by the National Wildfire Coordinating Group. It is called NWCG, is the acronym.

And it is really the highest level of prescribed burning standard that exists. And so I am assuming, and I am looking at Clayton here, are we getting concession and flexibility on that, from Commissioners Courts, to burn. Do you know?

MR. WOLF: For the record, I am Clayton Wolf. And I have tried my best to stay seated back there in the back. Because Randy Campbell, our program manager, is our lead on this. But my understanding is, in visiting with Ann just shortly, County Commissioners Court are authorized to grant exemptions, but they are not required to.

And so our staff tries to establish a good relationship to, I guess, ensure the county that we are going to apply those fires in a prudent manner. And so we are granted some exemptions. But my understanding is not in every case, and in every county. So we are still trying to build those relationships.

MR. SMITH: Good answer. Thanks, Clayton. Any other questions on those? If you have a chance to look at it, don’t hesitate to let me know, or Scott. Scott is quarterbacking this for us, and so will have some of the detail.

The last thing that I will just mention, Mr. Chairman, is a quick update. I think they are going to put a slide up. But it has to do with progress that we are making over at Sheldon Lake. As you will recall, we have launched a major initiative there to help enhance that environmental learning center on site.

We have forged a partnership with National Audubon to help promote access for youth and conservation education. One of the things in which we have raised a lot of private dollars for over the years, thanks in large part to former Commissioner Al Henry. This project was near and dear to him, is a new observation tower. And so you can see a picture of that.

That construction is underway right now. It should be completed sometime this spring. It will be 75 feet. All of the funds, for the most part, are coming from private donation, including the recycled or used oilfield pipe to build the tower. And so we are really excited about that.

And I think that is going to add a really nice visitor experience to that with the 5,000 or so kids that come out to that site every year. So we look forward to being able to report more to you all on that after we finish. And hopefully, we will have some kind of ceremony there at Sheldon Lake, once we get that completed, and cut the ribbon on it. So I think, with that, Mr. Chairman, I will conclude my remarks and turn it back over to you.

COMMISSIONER DUGGINS: Anybody else have any questions or comments?

(No response.)

COMMISSIONER DUGGINS: All right. Thank you, Carter.

Rich McMonagle, will you present your comments on the Capitol Construction Program update, please.

MR. MCMONAGLE: Good morning, Chairman Duggins, Chairman Holt and Commissioners. My name is Rich McMonagle, and I am the Director of the Infrastructure Division.

This morning, I will provide you Commissioners with a review of our Capitol Construction program, in preparation for the current legislative session. And I will also review two of our projects at the San Jacinto Battleground State Historic Site.

On slide 3 are four questions that legislators have asked in the past. And they are questions that legislators, or questions like them that the legislators will ask in the future.

Underlying these questions is a difference in perception between us and some people about different aspects of our Capitol Construction program. And I believe that these difference of perception has caused legislators to have a lack of confidence in our ability to quickly and efficiently spend Capitol Construction funds.

And so what I would like to do is go through each of these questions, to kind of describe our perception, and the different perceptions that are out there. And I think that being able to answer these questions will go a long way to gaining the confidence of legislators in our Capitol Construction program.

So moving on to the first question, in slide number 4. There is no doubt, at least within TPWD that our backlog of maintenance and repairs is several hundred million dollars. Last year, we did a project call. We reviewed projects totaling $250 million. And those were projects that were just submitted, of serious needs.

In the past, we tried to put a precise number on that backlog. And usually, that number did not stand up to scrutiny. What we were doing was, we were spending countless hours tallying the thousands of needs that are in our system. And those needs, or those costs were based upon the field estimates that varied greatly in their experience and expertise in providing those estimates.

So we had miscounts. We had double counting. We had inconsistencies. And all of that led to a degree of question of our ability to do this. So the misperception is that people who looked at this number, and there were certainly areas that could be subject to debate, people who looked at that number lost confidence in our ability.

They thought, well, if you can’t tell us how much your backlog is, maybe we shouldn’t be giving you any money. The reality of it is, is that the way we look at it is, we are looking at field estimates that are initial estimates that can range in variance from a factor of two. Therefore, in 2008, TPWD published a State Parks System study. This study was conducted by two respected firms; Fisher Hecht Architects out of San Antonio and Prose Consulting. And the purpose of this study was to define a high quality state parks system.

One of the recommendations from that State Parks Study was that we discontinue our efforts to quantify this backlog of deferred maintenance. Instead, what they recommended is that we adopt the industry best practice of investing a percentage of our asset value. That is, rather than just saying, these are what our identified projects are, instead, we look at an investment.

They took a very conservative figure of $808 million of our asset value and used a low percentage of 4 percent to come up with an estimate of $65 million per biennium is what we need in minor repair and capital repair in just state parks. Now, this study didn’t include Fund 9 facilities, nor this headquarters.

So we have used $32 million as the benchmark to say $32 million is what we need to stay where we are. Anything less than that, that means we are deferring the maintenance, and it is going to add to the backlog.

To put this in perspective, last year, we expended $33-1/2 million in capital construction. So with our current staff and current capabilities and current processes, we are certainly capable of maintaining a pace of $30 million in construction per year.

Moving on to slide 5, and our next question. I have put this slide, or variations of this up often. This is our generic bond program time line. Across the top are the six phases of a project, and the general times associated with those phases. Below that is a graph of time versus money.

So the red line is our expenditure curve that shows how money is expended. The dotted white line is our encumbrance curve. That is, how we obligate money to the State, or obligate the State to pay money when we enter into a contract. A capital construction appropriation has a five-year life span.

So the first nine months after the Legislature adjourns, we spend that gaining the approvals of this Commission, the Legislative Budget Board, the Texas Public Finance Authority and the Bond Review Board. And then we spend six months in planning, a year in design and two years in construction.

As you can tell by the curve, the majority, close to 80 percent of any project cost is in the construction. You can see, we don’t get to the construction until the second half of the appropriation. So what the perception is of others, is the Legislature comes back into session, and they look and say, well, you guys haven’t done anything. You haven’t spent any of that money.

When the reality is, all of that money is assigned to individual projects. They are just waiting to be encumbered when we get to construction. So I will stress that over and over again, that what is termed unexpended balances are funds that are actually allocated to individual projects.

So that leads us to slide number 6, talking about unexpended balances. There are some who believe that unexpended balances are just money that is sitting around not being used. In fact, they think that the larger the unexpended balance, the more money that is just not being used. And the reality is the opposite. Because as I said, all of that money is allocated to individual projects.

Now the last time I presented to this Commission, I gave a brief history of our recent UBs. And I showed a number of charts breaking it up into its component parts. I won’t bore you with that presentation today.

But I will get to the bottom line, which is in our current Legislative Appropriation Request, our estimated capital construction UB is $55,455,554. So we have to give them a precise number on that estimate.

What is important to note is, that 85 percent of that money is in two places. Over half of it is tied up in the Battleship Texas dry berth. And I will talk about that project later in my presentation.

And then a third of it is in general obligation bonds which the Legislature just gave us last session. So if you went over from my previous slide, all of that, those projects, money has been allocated to each of those projects. They are in design right now. And they are just awaiting construction.

So moving on to slide 7, those who believe that UB is just money sitting around not being used, they can’t understand that the money is not being used. Why do you need more money. Again, across the top is our generic ‑‑ across the top of this slide is our generic bond program time line. I have added legislative time line with the red arrows.

So this has kind of come up already, is that the first biennium of any appropriation has spent in the planning and design. The second biennium is spent in the construction. Now as we receive appropriation every two years, and the appropriation has a five-year life span, you can see that at any one time, we are working with two or three different appropriations.

So during most times, we have one appropriation that is in planning and design. And the appropriation from the previous session is in construction. So if we were to not receive funding from the legislative session, that would mean that there would be no money for design in that coming biennium. But the real impact is not seen for three or four years later when we no longer have money for construction.

And so therefore, construction would come to an end, and we would not have money to continue that construction. And that would become deferred maintenance and add to that backlog. Additionally, without that funding, emergency projects would not be funded. Those are those projects that emergent health and safety needs that we need to meet immediately. And so therefore, we would not have funding of that.

As I have said, the money that we have now is allocated to individual projects. Therefore, we need consistent, from session to session, funding in order to initiate new projects to maintain that momentum of the repairs that we have been doing. As such, in our Legislative Appropriation Request, there is an exceptional item, requesting $50 million for capital repairs, construction and development.

And of that money, $40 million is designated for statewide capital repairs, and $10 million for new development. And so moving to slide 8, I just summarize all of that. Again, a five-year appropriation life cycle. Expenditure curve that has spending at the end. Results in naturally, us having a lot of money that waits until the end of that appropriation to be spent. Our estimated UB is $55.4 million.

The majority of that is in two areas. As all of our funds are allocated to projects, therefore, we need continued funding in order to initiate new projects. And therefore, we are asking for $50 million during this session.

COMMISSIONER DUGGINS: Before you move on. You go ahead. Go ahead.

COMMISSIONER HOLT: I thought you were the Chairman of this.

COMMISSIONER DUGGINS: I know who the Chair of this group is.

COMMISSIONER HOLT: Actually, I’m going back on you a little bit, you said you need about 32, 33, and that is what you have been spending, a million per year. $65 million per biennium for ‑‑ and I am back on slide 4, for minor and capital repair and state parks. And I understand there is other needs.

MR. MCMONAGLE: Yes, sir.

COMMISSIONER HOLT: So now, we move forward. Let’s see if I can hit the right buttons here to go forward. So now, you have got a request in for $50 million for capital repairs construction development. Okay. That is for the biennium. Right?

MR. MCMONAGLE: Yes, sir.

COMMISSIONER HOLT: Okay. So that is 50. Yes. So you are actually asking for a little less than for obvious reasons, both what we were instructed to do relative to submitting to our friends at LBB and that group, LAR and all of that. Okay. I guess I am actually thinking to myself. So I am asking this. I see what you have done. And I am just trying to figure out how to do ‑‑ what our approach is going to be.

MR. MCMONAGLE: Yes, sir. Exactly.

COMMISSIONER HOLT: Okay. Relative to the walking our friendly legislators through this. Beginning with plan one, the issue you are bringing up is, why do we have these unfunded, the UBs, okay. Because that is a big issue. 2003 it was a big issue.

MR. MCMONAGLE: Yes, sir.

COMMISSIONER HOLT: And then, you are going to ask for this. Sorry. I am thinking out loud.

COMMISSIONER DUGGINS: I think that to continue with your comment, this slide that shows the funding, planning, design and construct close laterally is a great slide. Because it shows the two bienniums side by side, and why that exists the way that it does. It is easy to capture the concept in that slide.

COMMISSIONER HOLT: I think key to me is education, particularly about why do you need a big chunk of it. For example, it is for Battleship Texas that is unique project-type situation. Remember, you have got lots of new members, and who is going to be the Chairman.

There will be a new Chairman, a lot of new Chairmen of these committees. We’ve got our work cut out for us on this one. Because every two years you have got to go and start all over again, as Gene and Scott know, and Carter, were going through the last one.

COMMISSIONER DUGGINS: On slide 7, where you have the $10 million for development. By development, you are referring to the fund plan design segment of the horizontal bar.

MR. MCMONAGLE: What I am talking about, sir, is there is a difference between repairs, which are repairing things that we already have, new development means building something that we don’t have before.

COMMISSIONER DUGGINS: All right.

MR. MCMONAGLE: For example, group recreations facilities. We are doing one up in Palo Duro. But that is being funded by a donor. But it is to be able to do those kinds of things, especially those things at state parks. New development they think will bring in new revenue.

COMMISSIONER DUGGINS: Anybody else have questions or comments?

COMMISSIONER BIVINS: I guess I have a comment. And maybe it is just the way the legislative system works. But this is the third session that I have actually been Commissioner within. And is there any way we could avoid this reconstruction of the process?

I mean, we spend so much time meeting with all of the legislators about our spending process. And it doesn’t even with the senior members, it doesn’t ever seem to carry to the next session. They always ‑‑ we always begin from sort of a zero point, where we have to explain it as we have done here this morning. And at some point, it seems like the process would become common knowledge.

COMMISSIONER HOLT: Yes. You would think so, because this is the same process everybody has to do. So whether you are TxDOT or sales trying to build a restroom, and they are trying to build a $100 million highway, it is the same process. There are some that get it, and there is some that never get it.

And I am not trying to say that negatively or positively. It is just a reality. And I am like you. This is my fourth one. And of course, Gene has been through a hundred of them.

(Simultaneous discussion.)

COMMISSIONER HOLT: Not in a negative way. I meant it in a positive way. I guess every two years, you’d be quite old.

(Simultaneous discussion.)

COMMISSIONER HOLT: And Gene, correct me if I am wrong, but as you pointed out, you literally, the best way to go in as is if they understand it. So obviously, if you are sitting with Senator Ogden, you know I spent a long time going through it.

If you are sitting with somebody else, and even if somebody has been there, you know. And maybe even been on Appropriations, or been on Senate Finance or the even side of the equation, do you have to start all over again. And when they see UB, especially in a year like this, they just don’t want to give you anything. They not only don’t want to give you anything new, they want to know, they want to take that back.

In fact, on the Devils River deal, when I called Senator Ogden about it, and told him we had the $2.7 million that the members of the TPW was able to put in. And of course, Dan and his crew put in a lot of private money, he said, I want that back. That is the first thing he said. Okay. And he didn’t want me to use that. And I said, it is already appropriated for this one.

So my point being is, we had all better be prepared. And remember, he is head of the Senate Finance Committee. You know, he is probably the third or fourth most powerful guy up there. And you know, we built our credibility with him. But it is just a reality. It is going to be tough to get this 50. Now, I don’t know if that answers your question, Mark. I just think it is what it is, to use that term.

COMMISSIONER BIVINS: And I mean, I bring it up for Gene’s benefit, as much as anyone’s. Because he has had to bear the burden of this process longer than anyone. And this probably goes beyond anything we are capable of addressing, because it goes beyond this Department. But it seems like a flaw in the system.

COMMISSIONER HOLT: Yes. I don’t disagree. I know. I don’t disagree. And remember, it is going to be ‑‑ in a biennium like this, there is going to be so much moving of dollars around. And I am worried about the money up in Fort Worth.

And I mean, my guess is that a lot of money is not going to be appropriated, and we are going to have to scramble to try to hold on to what we can hold on to, and actually be able to use it. That is going to be one of the big issues. If they don’t appropriate it, then they can use it to offset deficit.

COMMISSIONER DUGGINS: Okay. Anybody else, Reed.

COMMISSIONER BIVINS: The thing that jumps out at me, and I don’t want to take up the time here. But maybe you can educate me. It takes 24 months to fund, plan and design. It seems like you would be more ready to spend the money than to take two years to get started. Now again, that may be the department, the way it works there. But it just surprises me.

MR. MCMONAGLE: Yes, sir. Part of the problem is, is that we do this backwards. Or the Legislature causes us to do this backwards. Normally, if you wanted to do a project, you are going to do the planning up front, and then figure out how much it is going to cost you to do the funding.

We end up doing it backwards. They ask us for a list of projects. And we do not have the money in which to do the investigation of the actual scope of the project. So after we get the funding, and it takes us a while to go through the hoops. Usually, up until April of the next year, to go through this Commission, the Legislative Budget Board, Texas Public Finance Authority, and the Bond Review Board to get those approvals.

Then we have to sit down and actually do the investigation, now that we have the money, into what the true scope of these projects are. Then we deal with the state procurement rules. And that ends up usually, it is a three to four-month, usually closer to a four-month process, in order to get a designer on contract, because of the state procurement process.

And so then, when you add that in to putting out the proposal and the bids, that gets us close to the end of the second year. And then it is a three-month process to get a general contractor on contract. So we usually are right on that border of the two years.

But in the meantime, of course, the Legislature has met, because they are meeting right now. And it is usually in the spring where we are actually finally getting all of the designs in and out to bid again. So the math is there, somewhere. I am not sure if I helped you. But I would be glad to.

COMMISSIONER MORIAN: I am sure that answer was comforting.

COMMISSIONER HOLT: That is what I had to do. And so, I don’t know if you want to take a few minutes today or tomorrow and maybe get with Rich and have him walk you through the process.

COMMISSIONER MORIAN: That is what I need to do.

MR. MCMONAGLE: Yes, sir. I would be glad to do it.

COMMISSIONER MORIAN: I look at it, and I say, if you have got a leaking roof, it takes you two years to get it fixed.

COMMISSIONER HOLT: Yes. Exactly.

COMMISSIONER MORIAN: It doesn’t make sense.

COMMISSIONER HOLT: And it is whether you are building a $25,000 restroom for a park, or a $100 million bridge in Dallas. It doesn’t make any difference. Anyway, we have tried to do some things. And Scott and Rich can walk you through it.

Shorten it somewhat relative to one of the regional contractors. But they just do what we do. Pass the TPW, every project with a separate contract and all that. That has helped speed it up a little bit. There is just a certain element here that we have to by law do a certain way.

COMMISSIONER MORIAN: Why don’t I just get with him?

COMMISSIONER HOLT: Yes.

MR. MCMONAGLE: Let me just add one more thing for the Commission in general. And that is, this is the generic time line. Individual projects move at different speeds. For example, engineering projects, wastewater projects, an engineer can do it very quickly, and then we are into construction.

Other projects that require an architect and that require destruction and creating a whole new building, or building a whole new building, those things take much longer, and it is keeping all of those things in the pipeline, and hundreds of projects. We have right now, over 200 projects going on. It is keeping all of those juggled and moving forward, which contribute to that time as well.

So again, this is a generic time line. Some projects from that, from the last session are already into construction. Others, we won’t even get the design for another year or so.

COMMISSIONER DUGGINS: But to Chairman Holt’s point, most of the time that is required, is required because of the process that we are required to follow.

MR. MCMONAGLE: That is certainly true. Yes, sir.

COMMISSIONER DUGGINS: I had the same question two years ago. So obviously, it is a good idea.

COMMISSIONER MORIAN: Well, you would think the funds would be expended more on a Bell curve, and we wouldn’t end up with these huge UBs. But obviously, we do.

COMMISSIONER DUGGINS: Sometimes, there are outside factors, like in the Battleship Texas project, where we have got a whole other ‑‑

COMMISSIONER MORIAN: That is a whole different issue.

MR. MCMONAGLE: So with that, I will move on to my last slide ‑‑

COMMISSIONER DUGGINS: Okay.

MR. MCMONAGLE: — which is slide 9.

COMMISSIONER HOLT: Morian, we are going to just move that Battleship right up and put it in your backyard, if it doesn’t sink in the ship channel.

MR. MCMONAGLE: And I will tell you, sir, that is our biggest concern is not sinking it in the ship channel.

COMMISSIONER HOLT: Please don’t do that. Back to wrecking railroads.

MR. MCMONAGLE: The rending on this slide is from the schematic design package, based upon the master plan for the State Historic Site of 2003. As you can see the locations for the proposed Visitor Center, and of course, the Battleship is where the Battleship is.

First the Visitor Center project. Some of you may recall, we have been waiting for the last year for a decision by the Federal Highway Administration whether they were going to require us to do an environmental impact statement. In September, we received an answer from them, that said that they had found no significant impact by the project.

Therefore, we are continuing with the environmental assessment, which is due to be finished this coming summer. If at that time, the determination is still that there is no significant impact, we will complete design in 2012 and construction, the following year. On the Battleship Texas dry berth project, last fall, we contracted the Houston office of AECOM which is a worldwide architectural and engineering firm to do the design.

For the next couple of months, they will be doing their preliminary design. After that, we will use that preliminary design for cultural and environmental reviews. And then a series of public meetings to present those findings.

If at that time, the Department of the Navy determines that there is no significant impact by the project, and we are not required to do an environmental impact statement, we will complete the design in 2015, and complete the project in 2017. And with that subject ‑‑

COMMISSIONER DUGGINS: Hasn’t this been pushed back now two more years?

MR. MCMONAGLE: This is the latest time line. I can’t remember the last three. It does continue to grow. Yes, sir. But we are very confident now in this. I have not had a chance to talk to him, but the project manager for this project met in the last two days with Naval Sea Systems Command, and we have ironed out a lot of the issues involved with going forward with, especially with the environmental assessment.

So we have had good talks with them recently. And I think we are in a very positive position.

COMMISSIONER DUGGINS: But is there no way to accelerate the work on the ship, versus the Visitor Center, all the constraints on the Visitor Center you have discussed.

MR. MCMONAGLE: Well, we are, right now, on schedule. It is a two-year process to do this environmental assessment as required by federal law for this project. So that is the part we are in. So it is all part of the design is a two-year window to do that environmental assessment.

COMMISSIONER DUGGINS: Are you talking about the dry berth, or are you talking about the Visitor Center?

COMMISSIONER HOLT: The dry berth.

COMMISSIONER DUGGINS: The dry berth, no. Now why has that been held up?

MR. MCMONAGLE: At this point, it has not been held up. We have been moving positively forward, really, for the last year. The distraction has been in the Visitor Center things. But at the same time, we have been continuing forward with the dry berth, and it has been getting a designer on contract, and beginning their preliminary design.

COMMISSIONER DUGGINS: You don’t think there is any way to move it any more quickly than what you just ‑‑

MR. MCMONAGLE: At this point, no sir. That is the time line. We scrubbed that schedule. And that is where the schedule sits. And again, it is those requirements to meet the federal National Environmental Policy Act and the National Historic Preservation Act, that two-year window there.

MR. MCMONAGLE: Good morning again, Commissioners. I am Rich McMonagle, Director of the Infrastructure Division. Joining me are Mike Mendiola of the TPWD safety officer, and Noe Cisneros of HOLTCAT. Over the last several months, the two of them have collaborated on a study of our safety program. And they are here to present those results.

I think all of us here at TPWD appreciate Chairman Holt in lending Noe to us. His expertise and counsel, acting as a role model for all of us on this has been invaluable in going forward. So I will turn it over to Mike.

COMMISSIONER HOLT: I appreciate that coming out of this one thing, so that the Commissioners can understand kind of what has this been driven by was, of course, the accident that happened. And we are going to talk about that in a moment, with our Wildlife Biologist fell on the machine. Also deaths on the law enforcement side since I have been on this Commission.

And in my business, my personal business, which is the Caterpillar machinery business, heavy machinery, we also have a lot of safety issues. And we got way behind the curve in my personal business, understood, learned, and Noe has been leading this over the last three years, of you have got to create a whole kind of culture change to use that term in your organization.

And so first, we wanted, of course, to review and see what the safety programs TPW had or did not have, and that kind of thing. And then review the accidents and that kind of thing. And then we want to essentially build a safety program that will be inherent at Texas Parks and Wildlife.

And I can tell you, it is a three to five-year project. It certainly was at Holt. My belief, we will talk about that. Because we have been around the country and learned a lot. Spent a lot of time inviting third party consultants and that kind of thing at Holt.

And I just thought we could get kind of leverage off of that and keep you guys from getting hurt. I just hate to see anybody hurt in any kind of accident that could have been prevented, maybe with either training or some previous knowledge, or something that maybe we as a partner should have done. So I think maybe we are on the right path. But I can tell you, it is no longer the same. It just doesn’t happen overnight.

MR. MENDIOLA: Thank you, Chairman Holt, Chairman Duggins, and Commissioners. As Rich McMonagle stated, my name is Mike Mendiola. I am the Agency Safety Officer for Texas Parks and Wildlife Department. This morning, I will be presenting the recommendations of the Wes Littrell Accident Review Board as well as the recommendations for our safety program.

Wes Littrell was a wildlife biologist who worked at the Gus Engeling Wildlife Management Area. Wes grew up on a farm in Grayson County, and had extensive experience operating tractors and heavy equipment. Wes tragically died in a tractor accident at the Gus Engeling Wildlife Management Area this past May.

Shortly after the accident, we assembled an Accident Review Board to analyze the accident, based on the facts presented in the Internal Affairs investigation. The Accident Review Board consisted of members of the Safety and Risk Management Committee as well as field staff. Ultimately, the Accident Review Board concurred with the findings of the Internal Affairs report.

Wes’s death affected all of us here at TPWD. And going forward, our actions are going to be committed in relentless efforts to prevent future tragedies. The Accident Review Board had an opportunity to look closely at the accident, and came up with these recommendations.

The first recommendation is to develop and institutionalize a formal training program for operating tractors and heavy equipment. Currently, training is done ad hoc, and we want to formalize the training, so that everyone receives the skills they need to work safely. We also found the need to enhance the standard operating procedure for operating tractors and heavy equipment.

We have an SOP, but the Board wanted to expand it to include things that are not, were not mentioned such as hydraulic equipment safety. As part of the Accident Review Board, we acted upon this recommendation, and have since rewritten the SOP.

We also wanted to establish minimum safety equipment requirements for tractors and heavy equipment to include seatbelts and rollover protection. This recommendation was also included in the new SOP. The most profound observation, as Chairman Holt mentioned, made by the Accident Review Board was the need for change in our safety culture.

Through discussions with the Accident Review Board and through Mr. Cisneros’ assessment, we have determined the culture of TPWD as best characterized by a get her done attitude. Field staff feel they are driven by pressure to produce results over all other considerations, including safety. Safety is not given adequate consideration in budgeting and operations, and demands exceed resources, causing safety to be compromised.

These factors combine into a deadly culture of complacency where safety is neglected. It is important to note that many of our sites are doing a good job in safety. This however, is on their own initiative, rather than being driven, being led from above and supported by all levels.

During the process of our assessment, Noe Cisneros conducted interviews with Deputy Executive Directors, Division Directors, site managers, park rangers, and other field staff. I accompanied Noe on these visits to state parks, wildlife management areas and inland and coastal fish hatcheries. We also toured HOLTCAT in San Antonio and spoke to President and Chief Operations Officer Allyn Archer and Vice President Ron Craft who shared examples of lessons learned and best practices.

In collaboration with Noe, we have developed a number of recommendations for improving our safety culture. Those recommendations fall under these four categories. These categories are interdependent and equally important. The following slides will expound on each one of these. To engage leadership and safety, there must be accountability.

We need to ensure that everyone in the agency understands management’s commitment to safety and that measures are put in place to continuously monitor and enforce safety. Safety needs to be instilled as a core value.

Regular communications between field staff, the safety program and management will reinforce the commitment and accountability. We would also recommend the safety program report annually to the Commission and quarterly to the Executive Management team.

The next recommendation category involves organization within the agency. In order to effectively influence a safety culture, the organizational placement of the safety program is crucial. We recommend adequate staffing solely dedicated to the mission of fostering a superior safety culture.

We recommend adequate budgeting for resources for the safety program, as well as safety within the divisions. Adequate resources include the investment in personal protective equipment, communications, training, and recognition programs. When we make these necessary improvements, we will also be staying true to Goal Number 4 of the Land and Water Plan, which is employ efficient, sustainable and sound business practices.

The third recommendation category is awareness. It includes establishing an internal safety communications program, and a unique identity and brand new component. The internal communications piece will create an umbrella signature for all safety culture change activities, events and communications. As part of our safety culture initiative, we are currently working with our Communications Division on a comprehensive communications plan.

"Safety matters" is the theme and logo that was created by HOLTCAT. And you will see it on hats, posters and bumper stickers wherever HOLTCAT products are sold. The next recommendation category relates to the processes that make this all happen.

These pictures show the results of two accidents that occurred this past year, at opposite ends of the state. No one was seriously injured, but this shows the importance of implementing the following processes.

We recommend implementing an employee perception survey which takes a cultural snapshot and quantifies where the best focus improvement efforts and build upon strengths. From there, we recommend forming continuous improvement teams.

We recommend adopting a near miss reporting system. Employees in need of immediate focus will learn accountability through coaching, and realize at-risk behaviors by writing their own commitment statements.

When utilized properly, these tools will allow for us to become proactive, versus reactive, as we are now. At this time, I would like to turn it over to Noe Cisneros to share some of his successes at HOLTCAT.

MR. CISNEROS: Thank you. First, Chairman Holt, thank you for the opportunity to work alongside of Texas Parks and Wildlife employees. It has been an honor and a pleasure to give my time to those who do an outstanding job of preserving our state parks and wildlife.

And by the way, I have some good news. They have all persuaded me to become an outdoors man. Unfortunately, my entertainment room at home is now abandoned.

Commissioners, Chairman Duggins, in 2006, HOLTCAT found itself in a situation where its safety management practices were inadequate. That was confirmed by our statistical information, which we internally compiled. But more importantly, it was confirmed by our outside customer. They were giving us some feedback.

So as a result, we examined our safety management practices. And we discovered that the traditional centralized safety approach, that included a safety representative which was largely focused on reactive administration compliance and safety inspection processes came up short. What we have learned since then is, a safe work environment is the result of purposeful, effective influencing behavior, and leadership.

We acknowledge that safety begins and ends with every single individual in the company, beginning with the owners. We realize that safety needed to become HOLTCAT’s way of life, because it is the right thing to do. And in Peter Holt’s own words, it was the ethically correct choice.

So to that end, we added personnel to our safety department which has led our effort since then. It has led our organization in learning, integrating, adapting, and reinforcing safe work habits in the workplace so we can achieve a zero accident workplace. HOLTCAT’s safety initiative began and continues to be a structured strategic effort to guide the organization towards a world class safety program.

To that end, we have achieved a tremendous amount of success by doing the following. First, approaching our employees to help us brand our safety initiative. We have also practiced caution and sensitivity around our messaging pertaining to safety. It is amazing what kind of messages we can send intentionally or nine times out of ten, unintentionally through our omissions or our commissions.

So we are a lot more cautious about what we say and what we focus on. Focusing on upstream activities versus downstream activities has gotten us a lot of gain. Sharing and more importantly, celebrating success stories is another thing that we do. We gather as Mike Mendiola mentioned earlier, we gather perceptions, employee perceptions. Because that is their reality.

And we use that to identify strengths and more importantly, opportunities. By the way, we don’t deal in problems. Because when we talk of problems, what kind of emotion does that invoke? Pretty negative. Right.

So we look at it as an opportunity. They are always gold nuggets to us. Engaging employees for ideas to address those same opportunities we identified through perception surveys is another practice that we have in place.

And most, last but not least, we utilized a question-based approach to eliminate at-risk behavior. Our effort required, actually, I would probably argue that it demanded a change in attitude. To that end, we now, four years later adhere to four basic rules of engagement.

The first one is overcome status quo. Reinforce what works. Make it a priority to learn quickly. And last but not least, be supportive of one another. Safety is never an opportunity to play the "I got you" game. Rather, or it is not an opportunity to play the "I catch you" game, or an opportunity to put a human through the most punitive process conceivable to man.

Rather, it is an opportunity to show one another how much we care. And we take that seriously at HOLTCAT. And it has taken us, or brought us a long way.

Today, HOLTCAT’s journey continues. It is a relentless commitment that can never let up. Because the minute you do, it goes all down the drain. And as much as we have learned the last couple of years, one thing remains the same, as far as we report, there is no servable at end safety.

Another thing that we learned is that every organization evolves. We know that. HOLTCAT is not an exception to that. So also, to that end, we also developed a tactical approach that supports a thoughtful strategic outlook. And it consists of the following; integrating safety into daily work practices, before, during and after the job is done.

Reinforcing responsibility and accountability for safety, for safe work habits at the first line supervisory and job holder levels. Learning from near miss incidents and unsafe practices. And last but not least, incorporating from this level throughout the organization safety language into our everyday languages and conversations and meetings.

We have seen a lot of success. And folks, we did not get to a high frequency rate intentionally. Quite the opposite. Unintentionally, we got there. We found ourselves focusing on other aspects of the business, and as a result, we took the focus off of safety. But we found that the minute that focus goes back on to safety. And that the message from the owners, the executives, is, safety is valued just as much as all of the other matrixes in our organization, the behavior tends to shift.

And I can prove it to you. I would like to share some numbers with the group, if I may. In 2005, and by the way, I am going to share with you what is called a worker’s compensation experience modifier rate. Now, I can attempt to explain what that is, but I will probably create a whole new science in doing so. So I am going to water it down for my sake.

What that comes down to, if you are at a one, you are equal to others that do the same thing in your industry, in terms of loss ratios. If you are below, you are doing far better than those in comparable businesses, or the same SIC or NAICS code. Is that helpful?

(No response.)

MR. CISNEROS: Okay. That said, in 2005, we had a modifier rate of 1.35. That is when we started our effort. And we started communicating through the organization what the owners wanted, and what their expectations were. In the following year, we went down to a 1.22. And then in 2007, we had a 1.12. The previous year, it was 1.22.

I hope I said that right. 2008, .94. The following year, .91. And I am glad to report that this year, we are at .79. It has been a steady decrease. Any questions, Commissioners? Chairman?

COMMISSIONER HOLT: All I can say is you can’t let up. And truly, it has got to come from the top in anything that you are trying to do, when you are changing an organization or trying to focus on anything that is an improvement, which is what safety is all about. It is a never-ending process. That is why I wanted to get it started.

I have been on the Commission seven, almost eight years. And we have lost two game wardens, this individual. We have had multiple accidents, of course, because I don’t know how many vehicles we have on the road, how many tractors. 3,000-plus employees, covering every inch of the state. Law enforcement obviously is in the business, a dangerous business.

So, it is time. And I wish I had focused on it. Wish at HOLTCAT I had done. For me, this is very important. And I appreciate you guys being willing to take this on. Col. Flores, I know your group is starting to make some changes also. Is that correct?

(No response.)

COMMISSIONER DUGGINS: Any other questions or comments?

MR. SMITH: Mr. Chairman, if I could, I just want to reinforce what was said. You know, you hate the fact that it took something as sobering as Wes’s loss to catapult us into looking at this so deeply. But I think Mike and Noe have done an extraordinary job of pulling out those areas that we absolutely have to improve.

There is no doubt that the work of our agency is dangerous. But it doesn’t have to be unsafe. And for the agency to aspire to a zero accident rate, folks can argue about the feasibility of that. But that is absolutely what we need to aspire to, in terms of owing our colleagues and their families back home. They are expecting everybody to get home safely after a day’s work for this organization.

And so the recommendations that have come forward in terms of what is expected from leadership at the staff level, with your support. The culture changes, and impressing on our colleagues the absolute criticality of making safety a part and parcel of every one of our activities in carrying out our duties is absolutely imperative. And so I just want you know how seriously we take this.

We wanted you to hear these recommendations. We asked them not to pull any punches. I don’t think they did. And so we have got our work cut out for us in terms of some changes, and we look forward to coming back to you all and reporting on our progress.

COMMISSIONER DUGGINS: In the meantime, who in the staff is primarily responsible for moving this forward as recommended?

MR. SMITH: And that is something we are going to be talking about at the Executive Leadership Team immediately following this. You know, Mike is our Chief Safety Officer. Historically, that program has reported through infrastructure. I think one of the strong recommendations from Mike and Noe and certainly, Rich is that that needs to be elevated to make sure again, that safety is given the highest look in priority inside the agency. And so, we are going to be making some changes there, in the very near future.

COMMISSIONER DUGGINS: Thank you fellows.

MR. CISNEROS: Thank you.

MR. MENDIOLA: Thank you.

COMMISSIONER HOLT: Thank you all.

COMMISSIONER DUGGINS: Before I turn it back to you, Mr. Chairman I want to just say on behalf of the rest of us, how much we appreciate your generosity and leadership here, in loaning us some members of your company. And in thanking before he is gone, Mr. Cisneros for his time and efforts here, I think it is very gracious of you. And I appreciate it very much.

COMMISSIONER HOLT: I had to make sure he got a park pass. He bought his annual park pass, lifetime. I appreciate that, guys.

COMMISSIONER DUGGINS: Okay. We have completed our business, Chairman Holt. I will turn it back to you.

DATE: January 26, 2011I do hereby certify that the foregoing pages, numbers 1 through 48, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Parks and Wildlife Commission.